Bossier Natural Gas Good but Not Haynesville

Bossier well flowing at 9.4 mln cubic feet/day

* CEO sees about $2 bln in annual asset sales as the norm

* Chesapeake shares fall 3 pct despite sector gain (Adds comments on Barnett shale, updates share prices)

HOUSTON/SAN FRANCISCO, Oct 14 (Reuters) - Initial results from Chesapeake Energy Corp's (CHK.N) Bossier shale play indicate there is a little less natural gas in place than in its high-performing Haynesville shale acreage, an executive said on Wednesday.

"It's not going to be quite as robust," John Sharp, Chesapeake's geoscience manager for Louisiana, told investors in New York in comments broadcast on the Internet.

Investors had been anxiously awaiting initial output data from a Chesapeake well drilled in August in the Bossier. Chesapeake said it had started flowing at a rate of 9.4 million cubic feet equivalent per day, below the Haynesville average.

Even so, Sharp said it was very early in the Bossier's development and that Chesapeake, one of the largest U.S. natural gas producers, has high hopes for the play.

The Bossier and Haynesville shales are both located in east Texas and northern Louisiana.

Chesapeake shares fell 3.3 percent to $28.49 on the New York Stock Exchange, compared with a near 1 percent gain in the American Stock Exchange index of natural gas companies .XNG.

Chief Executive Aubrey McClendon told the investors and analysts that his company would continue to sell off parts of its acreage. The company forecast $1.5 billion to $2 billion in asset sales for 2010, which McClendon said he saw as the norm.

Chesapeake is the most active U.S. driller, responsible for one in seven natural new gas wells in the country. But given the superior price of oil, the company aims to produce more oil as a share of output, up from just 8 percent currently.

Late on Tuesday, Chesapeake had increased its natural gas production forecasts for 2009 and 2010 and said it planned to spend as much as $4.7 billion on drilling in 2010, up from $3.15 billion to $3.35 billion this year. [ID:nN13201124]

Despite a recent sector-wide uptick in drilling, McClendon said U.S. natural gas production would drop in 2010, helping to push prices up toward the range of $7 to $9 per thousand cubic feet that makes drilling worthwhile for most U.S. gas.

McClendon said Oklahoma City-based Chesapeake would not exit the maturing Barnett shale play, which abuts the greater Dallas area, though he would consider taking on partners.

Allen Middleman, geoscience manager of what he called the "granddaddy" of shales in the Barnett, said Chesapeake could potentially double proved reserves there from the current 3.2 trillion cubic feet, which is up 17 percent in the past year. (Reporting by Anna Driver in Houston and Braden Reddall in San Francisco; Editing by Gerald E. McCormick, Phil Berlowitz and Bernard Orr)